Microsoft Corp. (MSFT) appears to have dodged a major bullet in its legal battle against Android operating system maker Google Inc. (GOOG).

I. German Windows Ban Dealt a Deathblow

While most Android OEMs havecaved to Microsoft's licensing demands, Google vowed to fight back. It has been using its $12.5B USD acquisition -- patent-rich Motorola Mobility -- as a key tool in that battle.

A win would likely free Motorola's fellow Android OEMs from licensing fees, while a loss would mean that Google would be forced to accept that part of the revenue from every Android phone sold go to Microsoft (typically, $10 or more per phone).

But the ruling also raises certain questions, as it did not prohibit Microsoft from enforcing its own German ban on Motorola's products. Much like Motorola, Microsoft secured the ban from a German court months ago. As a result Motorola's Android handset stock in the German nation may soon be taken to disposal locations and destroyed.

While it may seem puzzling how a U.S. court can prevent a German court from banning products, it can effectively do so as Motorola resides in the U.S. and could face fines and other penalties if it refuses to comply. Thus U.S. courts can in roundabout fashion prevent foreign court rulings, when the ruling is made in favor of a domestic company and the American court opposes it.

The now-defunct German ruling was based on a pair of h.264 patents -- EP0538667, a patent on an "adaptive motion compensation using a plurality of motion compensators" (filed in 1992), and EP0615384 a patent on an "adaptive compression of digital video data" (filed in 1994). As these are standards patents, Motorola may face additional punishments following an antitrust investigation by EU inquisitors regarding FRAND licensing abuses (as Motorola potentially should not have been able to sue with the patents).